Colombia Terminology

CUFE

Código Único de Facturación Electrónica. The Unique Electronic Invoicing Code used to unequivocally identify electronic invoices in Colombia.

DIAN

Dirección de Impuestos y Aduanas Nacionales. Administrative unit aimed to guarantee the tax security of the Colombian State and protect the national public economic order. It does so through administration and control of tax obligations and proper compliance.

ICA

Impuesto de Industria y Comercio. The Industry and Commerce tax generated when performing industrial activities in the trade or services sector. These activities can be developed directly or indirectly, permanently or occasionally, in a given property, whether there is a commercial establishment or not.

Magnetic Media Information

The magnetic media information corresponds to the wholesomeness of data that individuals and legal entities must present before the DIAN, regarding their transactions and operations involving third parties.

Partida Arancelaria (Tariff Heading)

It is a 10–digit numeric code, through which a determined product can be identified anywhere in the world. The Harmonized System (HS) established a common numeric and text system, which allows for the classification of products commercialized internationally.

Persona Jurídica (Legal Entity)

Company formed by one or more people able to exercise rights and contract obligations, which can be represented judicially or extrajudicially. This means that the legal entity can be represented by one or many individuals and-or legal persons. The legal capacity is used to give recognition to this abstract person, who will be given a name to be identified as a legally constituted company. Therefore, said company can assume obligations and contract necessary responsibilities to be able to develop or perform an economic activity.

Persona Natural (Individual)

An individual or natural person is the human being considered as a subject of rights and obligations. When setting up a company, individuals assume all the obligations that may be presented to them in the future.

RUT

Registro Único Tributario. Sole mechanism to identify, locate, and classify individuals and entities who are taxpayers liable to income tax and non taxpayers liable to income and patrimony. In addition, those responsible for general tax regime, those who are part of the simplified tax regime, withholding agents, importers, exporters, and other customs users. Also, other subjects of obligations administrated by the DIAN.

Self-withholding

Self-withholding at source consists of the liable taxpayers subject to withholding. The value corresponding to the respective withholding fee is self-withheld. Therefore, in those cases, the taxpayer acts as a withholding agent and at the same time as the liable taxpayer subject to withholding at source.

Withholding at the source product of self-withholding must be recorded both as a liability and as an asset. This is because the self-withholder generates a withholding payable and a withholding receivable that can be discounted from the withheld tax.

Support Document

It is the document used to confirm the purchase of a product or service. The buyer must generate it when doing transactions with a vendor who is not obligated to issue a sales invoice or an equivalent document.

Third Party

Any individual or legal entity with whom the company establishes a commercial relationship, whether they are a customer, vendor, or similar.

UVT

Unidad de Valor Tributario. Value measure that allows for the adjustment of the values in the dispositions related to taxes and obligations administrated by the DIAN.

VAT

Impuesto al Valor Agregado. The general sales tax, commonly known as Value-Added Tax is a tax corresponding to product and service consumption and gambling and games of chance. It is tax of national order, indirect, in rem, of instant taxability, and general regime.

Withholding at Source

Mechanism applied in the acquisition of products and services to pay income tax and supplemental taxes in advanced.

Minor amount

Payments or account credits inferior to certain values set by the DIAN, which can be reported without identifying the beneficiary of the payment or account credit.

INPP

National tax on plastic products.

IBUA

Tax on ultra-processed sugary beverages.

ICUI

Tax on industrially ultra-`processed edible products.